Wednesday, January 4, 2012

Oil Prices Rising; Fears of Naval Confrontation in the Persian Gulf

Oil prices soared on Tuesday after the commander of Iranian armed forces issued an explicit warning to US Navy aircraft carrier USS John C. Stennis to stay out of the strategic Strait of Hormuz. Brent crude future hit $112, and gold markets closed at their highest level in 10 weeks. An average of 17 million barrels of crude oil is shipped through the Strait every day.

The US dismissed the threat as a bluff, saying that it would continue to deploy its ships in the Persian Gulf “as it has for decades.”

Within hours of the US response, the deputy commander of IRGC, Maj. Gen. Hossein Salami, said in Tehran that Iran’s confrontation with the West had reached a critical point.

“Our position against the enemy [the US] has moved from strategic to operational,” Gen. Salami said [Fars News Agency, 3 January].

The US could soon have three aircraft carriers in the region: the returning Stennis, the USS Carl Vinson and the USS Abraham Lincoln.

Meanwhile, the Central Bank of Iran (CBI) flooded the foreign currency market in Tehran with dollars to stop the freefall of the national currency rial. Fars News Agency reported that the CBI is injecting another $200 million into the currency market on Wednesday to stabilize the rial and preventing it to slide below the parity rate of 16,000 per dollar.

The facility’s remoteness and proximity to the border with Iran makes it the perfect location for a variety of ops against Tehran. In fact, its one of the few major U.S. bases that doesn’t appear to be updated when veiwed through satellite viewers like Google Maps.

If Obama and Sarkozy think picking a fight with Iran on the eve of their respective elections is a good idea, then i wish them luck. let's see how their electorate respond to rising unemployment, rising food inflation, rising energy bills, and rising petrol prices.

Iran should begin to show Europe, the US, the Saudi and Gulf pimpdoms, that it's consent is required for regional stability. IRI has been on the receiving end for too long. Time to raise the stakes.

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